Is there a way out!!

Discussion in 'Legal Issues' started by jewell, 28th Sep, 2002.

  1. jewell

    jewell Member

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    Very new at property investment - thought we had done homework, but unfortunately not enough (have read many, many posts on the forum about doing homework - but didn't discover this forum until had signed up for this first property). Have discovered via the financial institution that we are browing off that the property that we have purchased is through a marketing company (I have seen all the bit and pieces and became horrified with what we had done) is valued well below what we paid (around $30,000 below). We have paid a deposit bond and will be settling soon, but does anyone have any ideas or information if we maybe able to get out of this contract or is it a permanent sign sealed and delivered (as they say) - any help would be greatly appreciated. We are looking at contacting a solicitor, but though we would ask if anyone on the forum had any ideas as you all seem to have experienced different facits of property investment. We live out of the metropolitian area and have found it difficult to get information readily.
     
  2. Rolf Latham

    Rolf Latham Member

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    Hi Jewell

    How far down the track are you ? If the val has come in at 30 k below, what was the actual sales price ?

    Understand that the larger of these organisations can be pressured into letting you out of a binding contract. They would rather let you walk that get lots of flack from media. At this point its a good thing that the valuation has come in short.

    You just need to know how. The smaller ones dont care about bad PR because they wont be here next week.

    Corner the GM of the organisation with the valuation and ask them to refute the outcome

    I note you have been sensible enough to not name names at this point.

    ta

    Rolf
     
  3. asy

    asy Member

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    Hey Jewell,

    Welcome to the forum!!

    I read your post and have a few questions for you, if you don't mind...

    I note your location states Victoria, is the purchase also in Vic?

    You said:

    "Have discovered via the financial institution that we are browing off that the property that we have purchased is through a marketing company is valued well below what we paid (around $30,000 below). "

    Other than the fact that this hurts the pride :( and the size of the loan (therefore the return %), is there a problem with the bank? What I mean is, will the bank now not lend the full contract price?

    You also said you will be settling soon... When? When was the contract signed? When is settlement and when did the contract become unconditional?

    One last question... (Sorry about the spanish inquisition, but I need to know all this to formulate a decent answer)... What are you trying to achieve? By this I mean, are you trying to get out of the contract? Would you accept the property if they decreased the purchase price to the valuation? Did they give any warranties, express or implied about the value of the property?

    The only other thing I will say is, you are LOOKING?? at contacting a solicitor? DO IT NOW!!! You will need one to affect settlement anyway, so get some piece of mind and see one now. I can possibly help you with a recommendation of a good property-focussed one, but it may not be as cheap as a conveyancer.

    Hear from you soon!!

    asy :D
     
  4. jewell

    jewell Member

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    Thanks Rolf and asy for your helpful information - was wondering whether pressure could/would achieve anything. It is a known company I believe. I read an article in the "Money" magazine about them and one person managed to get out of a contract.

    Asy I will email all the answers to your questions.

    :)

    jewell
     
  5. The_Husband

    The_Husband Member

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    Jewell

    You also be interested in the magazine, Australian Property Investor (API). The latest issue has an article on a rescue of someone in a situation like your in.

    Good luck

    TH
     
  6. jewell

    jewell Member

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    Thanks TH - will go and buy the magazine

    regards
    Jewell:)
     
  7. paulzag

    paulzag Member

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    $30K under valuation is worth talking to a litigation specialist.

    Do not roll over. Get API call Giovanni (I think it was).

    It isn't worth being quiet about it. Talk to your MP and the MP of the electorate the property is in. Write a letter to the state and federal MPs

    Please come back and share your experience as it occurs for moral support and to educate others.
     
  8. landlubber

    landlubber Banned

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    Paul Clitheroe (Money magazine) seems to have adopted a personal interest in these scams . Would probably be worth making contact via Money mag .

    Good luck .
    Peter H.
     
  9. jewell

    jewell Member

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    is there a way out

    Thanks for the information - have sought advice from the solicitor mentioned in the API magazine - very helpful - has put me in contact with a solicitor in Melbourne (closer than Qld) and we are seeking his opinion. Will post outcome when we have visited the solicitor.

    :) jewell
     
  10. Steve Navra

    Steve Navra Member

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    Hi Jewel,

    Did the seller make a full disclosure as to what their markup / commissions were?? (As they are legally supposed to.)

    If not, write them a simple note say that you were disadvantaged by their non-disclosure and that they should rescind the contract forthwith.

    Regards,

    Steve
     
  11. Aidnor

    Aidnor Member

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    Hi Jewel,

    I was in a similar position earlier this year, valuation come approx. $50K under!!

    However, contract was subject to valuation and finance and as such because valuation was so far under, simply got finance company (my own independant finance) to not agree to provide finance therefore this gave me a legitimate out.

    Never heard from developer again (nor my solicitor whom they had recommended! funny enough) Also, I think vendor (well known!) didn't make an issue of it because of PR.

    BTW, this was my first IP initiative, but didn't give up and have now secured an IP where valuation came in $50K over!

    Hope all goes well, and that you can get back on the horse and try again.

    Cheers,

    Aidnor